THERE is renewed optimism in the Gulf’s construction sector despite ongoing finance concerns, a survey said.

The survey by international law firm Pinsent Masons, points to growing optimism in the Gulf construction market but warns that this could be dampened unless action is taken to address finance concerns.

Pinsent Masons sixth annual GCC Construction Survey found that 90 per cent of companies perceived there to be greater optimism in the market, with 77 per cent reporting a healthier order book for the next 12 months relative to the previous year.

However, 96 per cent of respondents, which included some of the region’s largest contractors, developers, consultants, and other stakeholders, claim that the cost of capital for projects was either as expensive (43 per cent) or more expensive (53 per cent) than it was in 2012. Just four per cent thought the cost of capital was getting less expensive. As such, the issue of access to finance to fund projects and growth was highlighted as one of the most significant risks tempering the sector’s optimism for 2014.

Cash flow was also cited as a concern, with 62 per cent of companies complaining of longer payment periods, although this is a reduction from the 78 per cent of companies who expressed concern over the issue in the previous year’s survey.

Commenting on the results, Sachin Kerur, head of Gulf Region at Pinsent Masons, said: “The GCC construction sector is clearly very positive about the outlook for the coming year. The broad base recovery in the construction market sets a solid foundation for growth to continue in 2014.”